Being your own (digital) worst enemy

A few days ago I was trying to get me some car insurance, having bought a little run around Toyota for the eldest child, who is now learning to drive…

So, there I was looking up the usual car insurance companies, and comparison sites, and seeing what kind of a deal I could get for my precious first born. I began with a Google search – of course – and scoured some of the websites thereto thrown up in my direction.

A few minutes later I was trying to complete an online quotation form and seeing what the thing would cost me. The number seemed a bit high, so I tweaked a few variables, and was still getting an answer I didn’t much like.

So I rang the company – their call centre number was clearly displayed on the same page – and a very nice lady answered and helped with my query. It seems you don’t need to insure the driver, as they are an L-plater, and cannot get insured anyway. YOU, as chief driver, sitting in the passenger seat, would be the insured driver.

Ah-huh. Makes sense.

So I tweaked the online quotation form and – bingo – out popped a number that was far more to my liking. Simultaneously, the nice insurance lady told me her number, and it was $100 more than the same number I was staring at on the screen.

So, we had the same, exact insurance, from the same company, at the same time, and the online quote was significantly less than the one I was being quoted on over the phone.

How could that be? Had I done anything wrong online? Nope, it was all correctly done.

So I asked the lady if she could get me the same quotation, and I could buy from her. To which she prompted said (and this blew me away)…

“Sorry sir, I cannot help you with the online quotation. Is there anything else I can help you with?”

This response flummoxed me for a few seconds. What the..?

‘Hold the phone,’ I thought, ‘Is she saying that she cannot help me complete an order online for her own insurance, on her company’s own website, the same one with the phone number showing that I rang her on?’

Her silence was golden. My jaw dropped.

After a few seconds, I think I said “Oh… thank you very much, goodbye”, got off the line and duly completed my insurance online saving myself $100 or so.

This whole nonsensical episode got me thinking as to the logic of the rules that she was (presumably) being told to follow.

Did the company only provide phone assistance to those not able to do all the quotations online? As the online quotation involved less cost (no human being being paid to be on the end of a phone) is that why they offered it cheaper online? For the exact same product?!

But as I was already online and used their published phone number – ON THE SAME WEBPAGE! – to contact them in person, why were they not then allowed to even help me submit online?

They could have lost me as a customer at that very point.

I could have printed off the quotation, gone to a rival car insurance place and told them to match or even beat it.

Or I could have shoved their business through a fit of pique. (Happily, dear reader, I am not that small. Well I think not anyway.)

Surely, the call centre staff in the insurance company should be empowered to use their common sense, help close the deal, provide a service and take the customer’s money? No matter what mechanism that is done by? Online, phone, letter, walk in, carrier pigeon, steam engine, wax tablet..!

Why compete against yourself? Isn’t the market competitive enough?!

Here we are, 25 years or more into the internet age, and people are perfectly happy to buy online, and in many cases, happier. They are doing so in droves. Have you been to a shopping strip lately? Yeah, nor have I.

Online, customers don’t get hassled by pushy sales people, can shop when they like, compare what they are buying easily, get independent reviews, have their order placed immediately and get back to what they were doing 3 minutes earlier. No commuting, no parking, no rain, no 40 degree days, no fines.

If businesses are going to fight against online, and put up unnatural barriers for their customers, then they will struggle to maximise the benefits of their digital transformation. Indeed, they could be sowing the seeds of their own digital disruption. Butting heads against themselves.

Think like the customer. Think user interface, and customer experience. It’s not you you are trying to better, it’s the customer you should be focused on serving.

Always. And in every way.

Learning startups at uni… what a blooming great idea!

Now in its second year, UWA showcased its Launchpad graduates – which gives participants full six credits for any undergrad course at the university – at an annual pitch night…

They never had uni courses like this in my day‘ – is what almost every audience member over the age of 25 was probably thinking, as they watched the nine graduating teams from UWA’s Launchpad unit pitch on Monday night.

Not only that, most people were also thinking ‘I wish they’d had‘. And ‘what a great idea‘.

Yes, it’s true. A 13-week course, with mentors and guest speakers, took enrolled students through all the main stages of ideation, lean canvas model, customer problem, market validation, key metrics, channels, the pitch and reflection, culminating in a pitch night.

FUTURE LEADERS: Graduates from ‘Launchpad’ – UWA’s startup unit

KPMG consultant Graeme Sheard and Bloom Lab co-leader Jack Hallam put the students through their paces in a 3-hour workshop every Monday, with weekly assignments including blogging and business plan development.

It’s the only university in WA to offer such a course, and in a fitting conclusion, the final pitch night at Bloom showcased all 9 businesses, before a panel of judges, which included visiting Professor  Martin Katz from the University of Denver (Colorado, another hotbed of startups).

Last year, Humm Tech went through the program, and they were on hand, via video link to wish the graduates well. As reported a few months ago on, Humm are now based in San Francisco.

CLEVER CUPPA: Easy Brew’s drip coffee solution for adventurers

The startups this year were a real mixture, with five of the nine having a social enterprise angle, and four being educational.

The businesses ranged from a neat little coffee capsule for making a great cuppa in the outback to story telling cooking classes to help better understand different cultures to a program to help Year 12 students find their true purpose.

After much deliberation, the judges gave the pitch contest to Charlotte Pennel from ‘Mother & Bride’, who in a pitch perfect performance, explained how her new wedding planning web service works. Yes, she got married earlier this year – and found the process of the wedding planning a pain – and yes, her mother is also in the business. And she already has four weddings booked up on her platform.

Honourable mentions were given to the team from ‘I Can and Will Do’ (educational resources for rural kids in Cambodia), ‘EnviroVend’ (vending machine to replenish food and staples, to reduce plastic) and ‘Pay It Forward’ (an app that allows you to gift a meal to a homeless person).

All great ideas, and some real potential businesses here. Plus, another unit ticked off at uni. How good is that?!

~~

MAIN IMAGE: Charlotte Pennel pitching her ‘Mother & Bride’ startup

This article first appeared on Startup News.

Tech that did not exist 20 years ago, and tech that will dominate the next 20

20+ years ago my wife and I moved to Perth, and, although the locals would still regard me as a b$#@ding Pom, we are well and truly settled. Perth’s been great to us. We love the place. We now have 2 Aussie kids, who are privileged to be able to grow up in paradise.

20 years has flown by, but looking back over the last two decades, it’s incredible to think what’s happened around the world and how all our lives have changed during that time.

For example, the following 25 tech businesses and services simply did not exist when we stepped off that plane in mid 1997 (the year each one started is shown):

  • 1997 – Netflix, Yahoo Mail
  • 1998 – Google, PayPal
  • 1999 – Alibaba, BlackBerry, Emojis
  • 2001- Xbox
  • 2002 – LinkedIn
  • 2003 – Android, Skype, Tesla, iTunes, WordPress
  • 2004 – Facebook
  • 2005 – Youtube
  • 2006 – Twitter, Spotify, BuzzFeed
  • 2007 – iPhone, Fitbit
  • 2008 – AirBnB
  • 2009 – Uber
  • 2010 – Instagram, iPad
  • 2011 – Snapchat

How many of these do we totally rely on every day? Imagine life without any of them. That was only 21 years ago.

The question now is: what emerging technologies will dominate the next decade or more?

Many analysts seem to think it will be the following…

  • Artificial Intelligence (AI) and Machine Learning
  • Internet of Things (Iot)
  • The Blockchain
  • 3D Printing
  • Mobile devices and mobile internet
  • Autonomous vehicles
  • Robotics
  • Virtual and Augmented Realities (VR/AR)
  • Wireless power
  • Nanotechnology
  • Voice User Interfaces, Virtual Private Assistants
  • 5G

And of course, loads of other things that we have not even heard of yet. None of us had heard of the top list 20 years ago.

The trend is your friend

The Sydney Harbour Bridge was opened in 1932, and took eight years to build.

In 1926, you could see the large pillars on either side of the harbour, from which the famous steel arches would start to appear a few years later. By the end of 1928, the entry roads were clearly visible leading up to these pillars, but other than that there was no ‘bridge’ (yet), and ships and ferries could pass by through the opening as they had done for decades. [In fact, if you look at the photo above, you can see exactly that in 1930 and 1931.]

By 1931 most of the arch had been completed, and the future bridge could be imagined. A year later, in March 1932, the bridge was officially opened by the then Premier of NSW, Jack Lang.

In a film clip of the event, you can hear the cheers of the onlookers and the commentator saying “Can you hear those boats? Can you hear those sirens? What a great day this is…”

Not so merry for the ferry

Many Sydneysiders know the saying ‘Seven miles from Sydney and a thousand miles from care‘. This slogan was coined by the Port Jackson and Manly Steamship Company in the 1920s to promote its ferries on the Manly run. Without a bridge, a ferry was the only way to get from one side of the harbour to the other.

Yet, once the bridge construction had been agreed on, and building commenced, you could literally see the thing being built above you and across the 1km+ span of the harbour.

Before the bridge was opened in March 1932, ferries took 30 million passengers a year. After, ferry patronage plummeted to 13 million.

I tell this story to remind all industries that disruption to their mainstay business is often dramatic, yet can be foreseen. But in this case, the disruption was clearly visible to the ferry companies as the bridge was literally being built above their heads!

Often disruption is not that visible. It’s slow and inexorable, eating away at your business like white ants under your floorboards. Ignoring the problem does not make it go away. Putting one’s head in the sand does not protect you from its inevitability.

You may as well assume disruption is the norm. The more safe you feel, the more worried you should be. Check for white ants. Do your research. Think.

The good news is that you may have time on your side. Sydney’s harbour bridge took 9 years to build. Google took about that time to really take hold and make an impact on local advertising revenues. Same with Facebook.

It may have been that one day you looked around and suddenly Facebook and Google was all pervasive, but they took years ‘pushing the flywheel’ before they were so impregnable.

So, what are you doing in your business, in your industry, to prepare for your inevitable disruption? How are you positioning yourself so you can take advantage of the changes that are coming? Are you researching the possibilities of AI, bots, drones, AR, VR or the blockchain? All these, and more, are visible right now and making their creeping impacts.

Don’t be the ferryman, ignoring the inevitable while the seed of your destruction is being built around you. Get on a trend, because the trend is your friend.

Freedom means a free press that you pay for

Have a look around the world at the less democratic countries, and there you will see a neutered or government-controlled press.

I was in a South-East Asian country last year on assignment, and the ruling government managed to put one of the main independent newspapers out of business declaring it had not paid its correct amount of tax. Within days, the owners had either fled the country or were in police hands. The paper was duly shut down. All staff were out of work. Within a few more weeks, the same government ruled the opposition party was illegal, and it was duly shut down. There are elections this year, it’s a slam dunk for the ruling party. It’s a sham for democracy and the people.

Having worked at a media company, I know what it is like to be inside a news operation, striving every day to ensure the correct facts are published. Readers have a right to know what is going on, which is why they are drawn to news media. Often the ‘truth’ is ambiguous, out of reach, fuzzy. It takes hard work and time to uncover it, especially when some people would prefer it left uncovered.

Opinion is cheap. Truth is expensive.

News media, run well, will hold the government and powerful of the day to account, lest they run amok. Politicians may not like the freedoms and protections of the press, the intrusions into their lives this entails, but they understand in their hearts that this is important in a democracy.

Great travesties of justice have been exposed by a free press, be it the Vietnam War (so beautifully portrayed in ‘The Post’ movie), or Catholic abuses of children (2015’s ‘Spotlight’ movie), or Watergate (‘All the Presidents’ Men’). In fact, it is interesting that these David and Goliath investigatory battles all make for dramatic movies.

In many ways, the press has it hard. Not only can information be blurry, but with the leach of classified ad income to the internet, the newspaper industry has also lost its ‘rivers of gold’ revenue. Faced with declining income, they have been forced to cut back on editorial staff, the very life blood of any upstanding news organisation. The rush to ‘click bait’ and hits has seen a rush to the bottom, allied to the polarisation of media such that viewers only switch on to – or read stuff – that affirms their preconceived ideas. The ‘truth’ is now not so important. Readership, and holding on to your readers come what may, is all that matters.

Thomas Jefferson once famously said:  “Were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter.

Or, as the supreme court famously ruled on the Pentagon Papers case, “The press is to serve the governed, not the governors.”

No wonder dictactors and coup leaders take over the TV and news organisations first. Putin has Russia Today, and Trump has Fox News. Anything else, is fake news.

With a weakened press (around the world), the splintering of media and consumers just seeking what they want to hear, media is in about as weak position as it as ever been.

In order to grab attention, media organisations scream sensationalist headlines in order to cut through the noise. The rush to publish, by less trained and lower paid  juniors, means the ‘lie is half way around the world before the truth has got its pants on‘ (as Winston Churchill once opined).

As one Congressman said a few years ago, “You are welcome to your own opinion, but you are not welcome to your own facts.

Facts are facts. Proven. Scientific. Sourced. Part of history. Full stop.

People are switching off ‘The News’ as it’s always about bombs and deaths and disasters (fear). Fear sells. But it also puts the audience off, who want to be informed without being alarmed all the time.

In many ways, our world is safer than ever. There are less wars, less deaths, less die from disease and hunger, yet you would not know this from the TV news.

Something has to be done to save media (real media, one that seeks truth and holds truth to power) before it goes down the gurgler forever. For that’s where it’s heading. Slowly, but surely, the news industry is dying. Journalist jobs are disappearing, and once gone, are not coming back. It’s a race to extinction in ever decreasing circles.

One ray of hope is in the recent example the New York Times. Harangued by the US President (as the ‘failing NY Times’), the paper has actually put on an extra million paying subscribers over the past year. They now have more than 3.5M, that’s double the number of just 2 years ago. Thank goodness too, as their print ad revenue continues to decline.

What’s happened here is interesting, for the more the President rails against the ‘fake news’ media organisations it does not like, the more people flock to them and support and pay for the very same mastheads. The more the President is seen to be telling untruths (over 2000 in this first year alone, reportedly), the more people want to know the truth from a reputable source.

Asking people to PAY for news is incredibly brave, as there are thousands of web sites out there that give away news for free. So to see the NY Times do so spectacularly well behind a paywall is encouraging not only for their future, but also for the future of the medium overall.

I worked for a news organisation that made the bold step to put up a paywall way back in 2002, and erect an even stricter one in 2013. The result? Traffic to the site ROSE five-fold over the past 4 years and subscription income became the largest single revenue source (larger than advertising or events). So it can be done.

I would therefore argue that a free press is essential in a democracy (the so-called ‘Fourth Estate’), and that the only way to ensure its survival is to create content that readers value and pay for. In this way democracy flourishes. For without an informed public, how are we going to know who to elect? The US are discovering this the hard way right now it would seem…

The Bursting of the Bitcoin Bubble

Chart showing the price of one bitcoin since its creation in January 2009

Nearly every topic of conversation this holiday time is veering towards bitcoin, and its amazing run up in value this year.

What is the bitcoin? How do you make money on it? Should I invest in it? Do you have some? How do you get some? It’s amazing right?

OK, hold on. We’ve seen this movie before, and it always ends in tears.

At the beginning of 2017, the price of the cryptocurreny (or digital currency) bitcoin was around US$1000. Today, it stands at 18 times that. How many things do you know rise in price by 18 times in a year and hold their value? Remember, in bitcoin’s case, there is no central bank, or government or gold providing security and ensuring there is some value there. It’s all based on trust.

Over the latter part of 2013, during a two month period, the price of bitcoin rose from about US$150 to over a US$1050. A 7-fold increase. People were calling that a speculative bubble, and they were right. From its peak, the price collapsed in a few days and stayed around $250-$500 for the next few years.

By January 2017 the price had crawled back steadily to $1000, and made its first attempted break out in April reaching $1250, only to fall back below $1000 again. All seemed reasonable. Every time it tried to jump out of its price band, it would fall back and behave like a ‘normal’ asset price should.

Then in May this year, it leapt out to a new record, $2000, and with a few self-correction (perhaps profit-taking) blips along the way a rocket fuelled run up began that took the price to $4000 in August, $6000 in October and $8000 in November. Each time it passed one of these milestones, there was an immediate drop, before taking a deep breath and climbing to new records within a few days. By mid-November it was on a geometric up slope, the kind of price increases you always see before a crash. The momentum has continued through December, starting the month just below $10,000 and now, 19 days later, almost doubling again.

No wonder it’s the topic of every barbecue, coffee catch up and dinner party.

Imagine investing $10K in it in January this year. It would be worth $180K today!

This type of steep rise only ends in a fall. And the steeper the rise, the harsher the crash landing will be. It has gone beyond rationality and flipped over into euphoria. A mate of mine’s every second post on Facebook is about bitcoin (“get in!“). When this happens, you know you are near the end.

If you look at previous speculative bubbles, which are easier to spot after they have burst, and the factors that have caused them, you can clearly see they are all present today in bitcoin:

5 signs of a bubble:

  1. Prices are sky rocketing exponentially
  2. Widespread media coverage
  3. Irrational exuberance over the asset
  4. People start to believe the hype
  5. People who don’t normally invest start to

As soon as you hear people say “we’re in a  new paradigm!” or “this time it will be different!” then you know it’s time to bail.

Not only are these 5 warning signals shouting at us loud and clear right now with bitcoin, you don’t need a long memory to think back to the pre-GFC stock markets in the run up to 2008, or the house price rises prior to 2006 in Western Australia and the ‘mining boom’. I lived and breathed a tech boom during the dotcom bubble of 1999/2000 forming my own e-business during that time. When the crash inevitably  came, we knew we would raise another bean for a while, and so it proved.

The bursting of the bubble

Once you have this irrational run up, a relatively minor event can burst the bubble and send prices crashing back down. The ‘Emperor’s New Clothes’ fallacy that had been holding it up is seen for what it is, and flight ensues.

For the dotcoms it was a famous Barrons article (‘Burning Up’) in March 2000 which explained how the land grab ‘revenue growth’ was slowing and most of the dotcoms only had a few months of cash left. As prices fell, people sold shares (if they could) precipitating yet more price falls.

Once those left holding bitcoin realise they are not worth $20,000 or more, then you watch as they try to get rid of them as fast as you can say ‘blockchain’.

When will it burst?

How much further can it rise? Markets have no upside ceiling, and people’s irrational exuberance can go on for a while. But burst it will.

Recent history may teach us a lesson…

The world wide web was created in 1989 and went live for the world in mid 1991. At the outset, it was the domain of computer geeks. It was not until a few years later most of us even heard about this new technology. (Sound familiar?) Around this time we might have set up our first email address and started visiting websites. It was a few more years on that dotcom businesses started up trying to sell us everything online. By the time we heard of a few dotcom billionaires in the late 1990s, everyone and their grandmother was investing in dotcoms. The NASDAQ index ran up from 1,100 in late 1998 to over 4,600 in early 2000…

The NASDAQ index (of mainly tech stocks) 1995-2017

From the time of the WWW being given to the world to the ultimate crash of the dotcoms was 103 months (~ 8 and a half years).

Bitcoin went live to the world in January 2009. Add 103 months to that and you get August 2017. So the bitcoin run up has already outlasted the creation of the world wide web and the dotcom boom.

Drilling down further, you could argue the NASDAQ bubble began in earnest in Oct 1998 and popped in March 2000, 17 months later. The bitcoin bubble started in March this year, so according to this expect a burst around August next year. Somehow, given the strength of the bitcoin bubble (18 fold rise over 11 months, as opposed to the NASDAQ’s quadrupling over 17 months) one thinks it could come much sooner than that.

Return to form, price landing

If you examine the NASDAQ chart closely, you can see that the exuberant run up during 1999 was corrected by the crash, then a slower rise through to late 2015, and then a slightly increased growth of the index throughout 2016 and 2017. The index is now even larger than at the peak of the dotcom boom. The difference this time is that it is being driven by actual results, not spin and marketing fluff. Google, Facebook, Apple, Microsoft & Amazon are now 5 of the largest companies globally, and are producing immense (and increasing) revenues and profits. They are trading at fairly sensible multiples of 18, so don’t seem over priced.

Where will Bitcoin land, post crash?

I have no idea, but you’d expect it to be in the range of its pre-bubble trend, which was around $1000-$2,500.

Although I am fascinated by the blockchain itself, I am not going anywhere near bitcoin, or any other coins (including ICOs) for that matter. Nor, you may be interested to know, is Warren Buffett. He didn’t invest in dotcoms either.

Real (estate) disruption

Last week I visited an old watering hole with a former real estate client. He’d been one of the first to give our fledgling online business a go back in our first year (1999/2000), when it was far from certain that we had a valuable service, or that we’d even survive.

[Our early clients gave us a ‘fair go ‘in that wonderful, open Aussie way. There’s something refreshing about this positive quality of Australian culture. It’s deep rooted. It explains why voters turn on governments that go early to the polls (Carpenter 2008) and why they backed the same sex marriage even though most would not get direct, personal benefit. It just seemed fair.]

Over a cool pint of Squires we reminisced over what has become of the real estate industry over the ensuing 17 years, and how it has adapted to digital disruption.

In many ways, the day to day job of the agent has not changed much. The essential ‘list and sell’ activities are much the same as they were in 1999. But a few things have changed forever.

We used to drive buyers around properties”, my agent friend recalled, “We’d have to arrange to get the keys of the various properties and then pick up the buyer and visit them all. We don’t do that anymore as these days everyone has the information to hand on their phones. Who’d have thought that back in the late 90s?

Another major change is more obvious – the shift from print advertising to online.

Back in 1999, the real estate lift out of the Saturday paper used to be 120 pages thick with row upon row of property ads. Last week’s lift out (if you call it that, as it took little effort to “lift”) was 20 pages thin, and most of this was taken up by one page display ad fillers. There were barely 4 pages of classified (lineage) ads. Back in the late 1990s, this lift out was the real estate bible. If it was not advertised in there, the listing was invisible. Agents would crawl over hot coals to get mentioned in the editorial section.

My real estate remembered a story of that time.

The newspaper salesman visited our offices every year to “negotiate” the annual price increases with us,” he told me, “One day he was acting so arrogant, it really got on my nerves. He knew he had me over a barrel. What choice did I have? I got so annoyed I almost kicked him out of my office, to which he said ‘But I can get you tickets to the footy!’

“‘I don’t want to go to the footy with you!’ was my reply.”

How the power has shifted since.

A quick back of an envelope calculation suggests that the local Saturday paper used to rake in $1million a week in classified real estate ads at the turn of the millennium. $50M a year. And they would have done similar numbers in car, boat and job ads.

Nearly all of that revenue has gone online since, lost forever. It’s a salutary lesson for anyone thinking they are impermeable to change.

If the mega-profitable price-making monopolist newspaper business sitting pretty in a secure, isolated market can be taken down like that, then who is safe?

Back in 2000, the relatively small real estate website business, realestate.com.au (now called the REA Group) was worth barely $6M, was running out of cash and close to folding. It had had 3 CEOS in 4 years. In WA, less than 30 (of the 1000 or so) real estate agency offices listed properties on its website. The business did not put sales boots on the ground until 2002. In 2000/2001, the same newspapers REA would later disrupt were publishing articles crowing over its imminent demise post dotcom crash.

Yet slowly and surely realestate.com.au took hold, and today, 17 years on, is worth $10Billion. Yes, ten billion. That means its value has risen 1,600 times over the ensuing years, and is far more valuable than the various print media empires it disrupted. Imagine betting a lazy $10K on that – it would be worth over $16M today.

REA’s growth in value was not some fast unsustainable bubble; it was a slow, inexorable growth borne from the strong underlying shift of real estate marketing dollars from print to online. It’s the kind of growth in value that sticks.

Fundamentally, online platforms offered better value than print (for advertisers and users), 24 hours a day service, and agents could update the ads themselves whenever they liked (rather than phone them in by Thursday lunchtime as they used to do). The web offered agents the ability to build their own virtual shopfront (website) and have databases emailing out new listings to potential buyers automatically (alerts). The web offered ease of comparison, mapping, calculators, access anywhere anytime, and the ink did not come off on your fingers either.

It was fairly obvious that the web would replace print over time, and the leading website would make the lion’s share of the money. Instead of dominating one local market, the #1  website would dominate an entire country, and that’s what REA Group did and why they are worth $10B.

The irony, not lost on my real estate mate, is that the internet did not save agents from paying exorbitant advertising fees, it just shifted them from print to online.

We went from the frying pan into the fire!” said my mate.

But here’s what I want to know,” asked my former agent friend, “When will we be disrupted? Will we be ultimately be replaced by AI or some new technology?

Now that’s a good question,” I replied, “You have to think it will happen in the next 5, 10 or 20 years. My guess is it will happen slowly, over time. While it’s happening, it will be easy to ignore. Many will scoff at the suggestion that real estate agents will be replaced by new technology like AI or an app. There  will be disbelief, laughter and scorn, just as the rug is being pulled out from under them. It’s exactly how print behaved just as they were losing the battle unknowingly.

“But what happened to print media, Blockbuster, Kodak, Nokia and the postal service… will happen to you someday. It might arrive with little fanfare. It might take years to take hold. But you can bet some well backed tech business will reinvent how property is bought, sold and rented. If they make the experience far better than an agent, and their system becomes trusted and feels secure while saving loads of money, you can be sure people will give it a go.”

That’s digital disruption, in a nutshell.

Get them on the drip

When we were contemplating the best revenue model for aussiehome.com, the online real estate portal we established in 1999, we considered the following main alternatives:

  1. Subscriptions – real estates agents pay regular fees to list their properties
  2. Advertising – advertisers pay for display ads on the website
  3. eCommerce – home seekers can buy/rent directly off the website

Any other revenue model you can think of is just a variation of the 3 above. Note that for each option you have a different paying customer. And knowing who your customer is, and what problem you are solving for them, as I have discussed in these pages, is critically important.

In subscriptions, your client is the real estate agent, and the users of the site (home seekers) get to use it for free. What would agents want in return? Enough enquiries (and as we learned over time, a listing edge) to justify these fees.

Advertising income means your paying customers are your advertisers. In return for the promotional investment on your site they expect to see lots of views of their ads, and click throughs. Likely advertisers would be banks, mortgage brokers, home builders and any other home-related businesses.

The final one is pure ecommerce – taking on the whole industry, competing against real estate agents, and selling/renting properties directly off the site. Back in 1999, barely 3% of all properties in WA were sold privately (ie by the owner, not through an agent).  Fortunately, we discounted this 3rd option. We did not believe the world was ready for home owners to take a punt on a new website, chancing their arm with their largest financial asset (their house). 18 years later, this is still the case. Nearly everyone selling their property in 2017 does so through a licensed real estate agent, and REIWA member. ‘For sale by owner’ sites have floundered.

Selling ads, we thought, would be tough as we’d be up against Yahoo! and others and we’d need huge traffic to pull any decent ad dollars. This would mean raising a King’s ransom in funding, and blowing most of it on our own promotions. This seemed too risky. Another good decision this, as Google and Facebook would come along and scoop up nearly all of the digital ad money in Australia.

So, almost by a process of elimination, we plumped for subscriptions. Subscriptions is no easy solution though. Real estate agents, and most small business owners, resist paying ongoing fees. It adds to their costs, and makes their business riskier. They would be far happier paying for something large in one bulky purchase (as we found out, on such things as banner ads and websites).

Subscriptions is also a long, slow row to hoe. In order to get properties on the site, you need enough agents to be paying to load them up. Only then will visitors have enough content to peruse, find your site useful and return.

This is the major problem with brand new two-sided market places. You have to build supply and demand simultaneously, and this is extremely difficult.

When you’re building a 2-sided marketplace from scratch, how can you get demand when you have little supply, and how can you get supply when you have little demand?

Uber solved this curly one by paying the first drivers to sign up in a city some income, irrespective of whether they had passengers. They realised that the minute the first passengers used the service, there had to be Uber drivers nearby. Uber knew this first experience had to work well, so their early adopters would rave about the service. They grew from there.

We did something similar. We gave away 3-month free trials to our early real estate agents, so they could plop all their listings on the site, for free, in order to get some supply up there. As soon as the first people looked on the site, there had to be hundreds of properties for sale and rent. Once a few agencies were supporting us, it became easier to get others to give us a go. Obviously, this does not produce any income, so we could not do this forever. After our first year, we stopped giving away  free trials.

Slowly, but surely, we started to earn monthly income. As agencies came off their free trials, they started to pay a fee. Not huge bikkies, but something. Once you get customers paying for your service, you are in business. They take it more seriously than a free offer. They update their listings, and then, something wonderful happens – they start to get enquiries. We could see the email enquiries coming directly off the site. (We could not see phone calls of course, but these were happening, so we were told.)

On top of this base of subscriptions income, we added some ecommerce (users could buy Landgate sales evidence online) and advertising (banner ads for agents, and display ads for mortgage brokers and the like). We then moved into web site design for our agencies (building their sites off our system), magazines and in time feed income so that our clients could be on up to a dozen sites through us. But it was the bedrock subs income that built the strong foundation.

As Seth Godin wrote recently, the ‘drip drip drip‘ of subscriptions is the most sustainable business model.

Newspapers have had to learn this. The NY Times put on 800,000 new paying subscribers since Trump was elected. Their shares are soaring, built off a base of 2.2 million subscribers, up more than 60% in the past year. Failing NY Times fake news indeed. Quite the reverse Mr President!

One thing that took me to Business News in 2013 was that their readers had been paying for subscriptions since 2002. By 2017, these subscribers were renewing at record levels, and subscriptions income was the largest single income source. A great local story of a media company taking a brave route, and prevailing.

Netflix entered Australia 2 years ago, and now 1 in 3 Australian households have a subscription. Quickflix, its Aussie competitor, started more than 10 years ago, never passed more than a few hundred thousand subscribers. Although prevailing against all other local competitors, they could not compete with the US-backed giant and shut down within months of Netflix’s entry.

Realestate.com.au’s valuation today is north of A$9 billion. I remember when it was worth $6 million, after the throes of the dotcom crash in Easter 2000. But it built itself up, and the ‘network effect’ of having pretty much every agency on board meant every agency had to be on board, and everyone went there to view properties. A complete 2-sided market of immense power, they could pretty much charge what they like. It now costs more than $1,500 a property to list on the site.

As my cofounder Nick used to say to me, “Charlie, get them on the drip.” How right he was.

Left to their own devices


I could leave you, say good-bye. I could love you if I try, and I could, and left to my own devices I probably would,” sang The Pet Shop Boys in 1988.

It’s not one of the best songs ever written, but the ‘left to my own devices’ stuck in my mind, and, these days we are often left to our devices, of a different kind. We all have various (mobile) devices, and we reach for them with increasing alacrity these days. That’s fine, I assume, as long as we are performing our main functions, such as conversing with our fellow human beings, giving attention to our friends and family, doing some meaningful work and getting out and about in the sunshine every now and again.

The question is, how much is the next generation on their devices, and is that good, or bad? As parents, it can be easy to plonk the iPad in front of the children to entertain them at the restaurant, or when we want some peace. But what message does this send? That, when eating out, we don’t want them to converse across the table? That their needs and questions are of no import? What kind of parenting is that?

A few years ago, Taiwan introduced a law restricting the amount of time children should have on screens and devices. Apart from the obvious issue of how on earth do you police such a thing, was Taiwan correct in doing so, and if so, why? Juveniles, so said the new law, “may not constantly use electronic products for a period of time that is not reasonable,”  which begs the question, how much time is “not reasonable“? Parents and guardians could be fined up to A$2,000 or so if found in breach of the law.

I expect the answer is somehow in a happy medium. 6 to 9 hours a day glued to a screen, I think we all can agree, is not healthy. Kids need to get out and run about, climb trees, play sport, ride bikes, interact, and get up to all kinds of nuisance. Is it that we (helicopter) parents are buzzing around too much these days, not allowing kids to be kids? Local comedian Griff Longley certainly thinks so, and he has set up a not for profit organisation Nature Play that encourages parents and their kids to get out doors and do stuff. Like make cubbies. Whatever, just get out there and do things. Together. Unstructured. Like we used to. “It’s OK to stuff up and have stuffups”, says Longley. Dang right. It builds resilience, it’s how we learn.

I wonder if the screens are just an easy babysitter option, or actually serve some positive purpose for the children? Simply taking them away is not the answer. The devices are out there, everyone has them, and to deprive children of them is to hold them back compared to their peers. Certainly, there needs to be some happy balance between active play and iPad consumption. Certain hours of ‘screen time’ can be negotiated, depending if it’s a school night, weekend or holiday. Screen time can include all screens, TV, play stations, Wii and mobile devices.

For younger kids, I’m a fan of the Family Zone service, which can be set up on every device, and provides screening of everything the child does online, limiting access to questionable sites, and allowing the parent to set times when devices can be used, and when they can’t, anywhere. I’ve found children are fine with rules, as long as they are clearly explained, and consistently enforced.

In this digital age, we shouldn’t ban our kids from being online, or becoming confident with technology. It is going to be a huge part of their living and working lives. They should certainly understand there is a place for devices, and certain times when they are put away. The precise rules, I reckon, like everything, are up to the parent and child themselves to negotiate and enact.

Leaving them to their own devices, I certainly would not.

7 Perth podcasts worth listening to …

7-Perth-Podcasts

In an era of self-publishing, you might expect to find some local West Australians broadcasting their views via the channel of podcasting.

I’ve been listening to, and in some cases have been a guest on, some of these pods. Some of the magnificent 7 highlighted here have been podcasting for years, some are relatively new to the game, but all are professionally put together and are (in the main) a joy to listen to. In each case, I can tell you that I have met and know the people involved. They are all producing them (for free) for the right reasons – to educate, interest and in some cases probe the listener.

No doubt there are many more people podcasting away in WA. In a search for others, I found a plethora of church podcasts (over a dozen) and quite a few that had been seemingly abandoned. The ones I highlight are all podcasting away frequently, once a week in most cases.

Before I get to them, here’s a brief history of podcasting…

The term was first coined by a British journalist back in 2004, a year after the iPod came out – so it’s a blend of ‘iPod’ and ‘broadcasting’. In fact, ‘audioblogging’ as it was known before, started 15 or more years earlier in the mid 1980s, with the humble beginnings of the world wide web. It was a quiet, slow burn for the most devoted during the 1990s, until the new millennium dawned and the advent of easy to use audio web players.

As an activity, podcasting took off in the mid 2000s with the iPod revolution (‘1000 tunes in your pocket‘), but then fell away as we all jumped onto video sharing (with the rise of Youtube) and the distractions of social media. The fact that pods were only audio saw them lose out in the popularity stakes to the wilder, visual treats of Facebook, Twitter, LinkedIn and the rest.

Ten years on, and podcasting is now making a come back. Between 2013 and 2015, the amount of podcasts on iTunes doubled. By 2015, there were a billion podcasts subscriptions – the average person subscribes to 6. One in three US citizens listen to podcasts, 67 million of them monthly. 52% of podcasts are listened to at home, 18% in the car. 85% of all podcasts are listened to through to the end, or mostly the end.

I find podcasts fill that otherwise dead time commuting to work, driving in the car or doing the gardening. Yes, as I’ve written about before, it’s good to let the brain declutter, but listening to a podcast is also a great way to learn and engage the brain. I subscribe to a whole host of different pods from around the world, on such varied subjects as philosophy, biographies, sport, satire, business, design, technology, history and politics. It’s radio on demand, and you can consume a tremendous amount of free and interesting content on almost any subject under the sun. Perhaps, I will share some my world wide favourites in another post. For now, let me describe, and humbly invite you to subscribe, to these 7 local podcasts, which I think you will find are well made, and great to listen to…

 

‘The Road to CEO’, and ‘The Key to Authority‘ from Jenish Pandya

If there is someone in Perth who has most inspired me to become interested in podcasting, it is Jenish Pandya. One of the nicest guys you’re ever going to meet, Jenish has already concluded his fantastic ‘Key to Authority‘ podcast series (57 episodes over 2015 and 2016) interviewing thought leaders on various topics, and now has started a new series, ‘The Road to CEO‘, where he interviews CEOs all about the job of becoming a CEO and what it’s like ‘in the hot seat’ so to speak.

I was interviewed on both, and was impressed with Jenish’s passion and energy for the podcasting format. He’s become a bit of  a local expert, and can often be seen speaking on the topic of podcasting. Not bad for a Water Corp engineer, who does all this in his spare time.

 

‘Mark my words’ from Business News.

Mark Pownall and Mark Beyer, are CEO and Editor respectively of WA’s only dedicated business media organisation. The 2 Marks are the most respected business journalists in Perth, and their 18 minute weekly show is a must listen to those who want to keep abreast of what is happening in the world of business in WA.

They’ve been podcasting now for more than three years and have a nice, natural style together. They obviously respect each other greatly and are firm friends and colleagues. Mark P asks most of the questions while Mr B provides most of the detailed analysis, although Mr P also chips in with his perspectives as well. It makes for a really interesting combination, and for those of you who may have missed what’s happened in WA during the past week, it’s a great catch up. I like hearing each other’s perspectives plus a welcome sprinkling of humour. More than you might get in the paper or online, you get to hear why these major stories are the main stories of the week.

As a nice extra, Mark Pownall also records his regular ‘CEO Lunches’ with WA business leaders and puts these out on the same podcast channel. Subscribe to Mark my words on iTunes or Soundcloud or listen to past episodes through the BN website.

 

‘Ask Alyka’, from Alyka

The Subi-based digital marketing agency has recently begun its own podcast, with Alyka cofounder Zion Ong and digital strategist Beth Caniglia talking about a different digital topic, often with a guest in the studio.

These guys go to town, as you might expect, with 3 microphones and 3 cameras recording the action, turning the podcast into a fast-paced lively show available through all the normal podcasting and video channels. Topics mainly centre on digital marketing, naturally, as that is their area of expertise. I was interviewed in a recent one, on the topic of digital disruption, and I was impressed by the laid back style of the pod, and the professional production standards.

If you want to know what’s going on in the digital marketing space, then Ask Alyka is the pod for you. Subscribe on iTunes.

 

‘WA Real’, by Bryn Edwards

Based on the London version (London Real), WA Real looks to interview real people and get into the real stories behind their life.

A fairly recent podcast, having started last month, UK immigrant Bryn has already posted 7 interviews of between 30 minutes and more than an hour duration, so this one really gets under the skin of the guests, and a deeply personal discussion usually ensues. I particularly enjoyed listening to local comedian Griff Longley, who is the founder of Nature Play, a local not for profit which aims to get kids outdoors with their families. “Kids have to learn how to stuff up! It’s OK to fail and have a go.” As a parent of two, I loved this discussion and found myself saying ‘Yes!’ – which greatly amused my fellow commuters that morning.

Subscribe on iTunes.

 

‘Music on the Move’, from the PSO

OK, a disclaimer upfront here – I am a huge fan of PSO founder Bourby Webster, having known her since uni days, and I’m chair of a PSO technology advisory board.

I also encouraged her to start a blog, and bless her, she did, and it’s great listening. She interviews local or visiting musicians who might be performing in an upcoming PSO concert, and we get to hear what happens behind the scenes, and the motivations and passions of the people who put such a complex live performance together. Listening to Bourby chat with Matt Allen (WAAPA Gospel Choir) 5 days prior to the world premier of ‘George Michael: Faith and Freedom concert’ brought the whole experience back to me, one, I am not ashamed to say, brought me to tears.

Subscribe on iTunes for some classical music food for your brain. Go on, it’s good for you.

 

‘Brand Newsroom’, from Lush Digital Media

When you have a former BBC and ABC radio host James Lush managing proceedings, you know you’re going to get something polished and professional. That’s not to decry co hosts Nic Hayes (Media Stable) and Sarah Mitchell (Director, Lush Digital Media) who make the perfect team to discuss the main content marketing themes of the day. Their collective experience and wisdom absolutely nail every topic, and they usually have a guest in their studio or online, including one I absolutely loved with Nenad Senic arguing that print was not dead, and could do way more things than digital can, in some cases. 160+ episodes in, there is a tremendous amount of great content in their back catalogue to listen to.

Subscribe on iTunes.

 

‘Business Marketing Show’, from Ed Keay-Smith & Brendan Tully

I’ve got to know Ed over the past years as we are both eGroup members, an association of internet entrepreneurs and managers which meet first Tuesday of every month to discuss all things digital. He interviewed me on this podcast back in March 2017, when I was CEO of Business News, and he has a lovely way with his guests, laid back and chatty. Ed keeps the whole thing real, without worrying too much about fancy production tricks. It’s a raw interview, plain and simple, and some great content. He has built up quite an impressive audience with around 5,000 listeners per show, with more than 70 podcasts over the past 3 years.

If you want to know more about SEO, SEM, remarketing, online video, … for small and medium sized businesses, this is the one to subscribe to.

 

So, I hope that inspires you to subscribe to these local WA podcasters, and give them a bit of love and support. More importantly, listen and learn. And if you like a particular podcast, don’t forget to go in and give them a positive review. It really makes a difference in their pods being discovered by others.


UPDATED – the original post neglected to list Jenish Pandya – a terrible omission, now corrected!